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Sweetened pensions or no, water employees will cost $1.6 billion
September 14th, 2009, 6:01 am · 24 Comments · posted by Teri Sforza, Register staff writer
(Update: Met postpones Tuesday’s vote until October)
(Should Met raise pensions and pay? Vote in our poll here)
No matter what the board of the storied Metropolitan Water District of Southern California decides at its meeting tomorrow, it’s going to shell out $1.6 billion or so to keep its workers happy over the next five years.
If it approves controversial new union contracts that hike employee pay and pensions, it would cost some $1.55 billion to $1.58 billion, according to a report for the board.
If it does not approve the new contract - keeping present terms instead - it will cost, well, some $1.58 billion, the district says.
The proposed contract, which would run through June 2014 (new-met-union-contract), could hike pay up to 23 percent over its life if the economy goes well. It would also hike the pension formula for retirees by 25 percent, as we’ve reported before. That would cost some $70 million over the long haul, at a time when Met’s investments in the California Public Employees’ Retirement System have tanked at least $400 million, and when water rates are slated to rise 31 percent, and when public outrage over generous public employee pensions are at a fever pitch.
The district says employees will offset the cost of the pension increase with “give-backs.” They’ll be paying more for their benefits and giving up New Year’s Eve as a paid holiday (pity, that), bringing the total paid holidays down to 13 a year. They’ll also be giving up one of their three personal days. (See chart below assigning dollar values to these give-backs.)
Opponents, however, say the give-backs are temporary, and the pension increase is forever and ever and ever. It has whipped up fierce opposition among some Southern Californians from Los Angeles to San Diego (see text of two cool-headed opposition letters here).
“The negotiations and analysis of ’savings’ … were handled by senior staff that stands to gain the most from the (contract) you will vote on next Tuesday,” says one letter to Met from Marcia L. Fritz, CPA and vice president of the California Foundation for Fiscal Responsibility.
And in what seems to be a nod to those sentiments, the agenda report lists twoactions Met’s board can take tomorrow:
- Approve the contract;
- or ”Do not authorize. Direct staff to continue negotiations.”
Met is governed by a 37-member board of directors. Those directors are appointed by its 26 memberagencies - the cities and water districts of Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties, which quench the thirst of 19 million desert-dwelling Southern Californians.
Reps from Orange and San Diego counties are unifying in opposition to the retirement bit, but it’s unclear if they’ll be able to whip up support from enough of their colleagues to block it.
It’s going to be some real drama. Want to take some action?
- To read the board agenda, click here.
- To read the report to the board, click here.
- To read the actuarial report on how much the sweetened pensions will cost, click here.
- To see a Power Point defending the contract, click here.
- To see who is on the board of directors (click through for contact info), click here.
- To read a couple of letters opposing the new contract, click here.
More Watchdog:
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- Stalled spay-neuter bill will be resurrected in January
- The $100,000-plus pension club in Anaheim, Brea and Buena Park
- Is California’s prison system a money-sucking mess?
- Controversial pet spay-neuter bill stumbles; push is on to save it
- Hit-and-run suspect charged with two felonies in ‘Mission: Impossible’ case
- $15,000 for beer bracelets at Orange International Street Fair
- Retired Metropolitan Water District GM has collected $3.6 million in pension pay, with more on the way
- Wife of former Garden Grove police chief could face more than 20 years behind bars
- Puppy mill crackdown looms, and spay-neuter bill is in fight for its life
- Don’t be suckered into giving to fake fire charities, AG warns
- Seal Beach man got stuck to spa drain - on new safety cover
- Exec at nonprofit that runs SAT test makes nearly $1 million
- Retiree is thrown out of his own gym in Laguna Woods Village
- Pension hike is part of labor contract that will save money, Metropolitan Water District says
- Metropolitan Water District prepares to hike employee pensions, despite investment losses
- Complaints cause Caltrans to stop daytime landscape watering
- Does The Watchdog really want to demonize little old ladies?
- Air marshals who disclosed secrets for tryst and ego fared better than the guy trying to protect safety
- Golden parachutes for public retirees will sink us all
- OCERS withholds pension data from taxpayers
- Retirement benefit shrinks $22,775 for axed assistant sheriff
- Guns go missing in a handful of OC police agencies - but loss is rare
- Protest Saturday will support mail carrier accused of cat-napping, now on unpaid leave
- Trinity Broadcasting, in tightening times, pays family members more than $1 million
- Dems hear the heat and scale back plans to buy executive jets
- ‘Al’s Brain’ is declared a success, and OC Fair will produce more ‘feature exhibits’
- Loretta Sanchez joined half-million dollar global warming junket to tourist hot spots
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- National Boy Scouts explain $1.6 million salary for top exec
- Police, and post office, investigate alleged cat-nappings in Huntington Beach
- Southern secession from OC water union would waste millions, report says
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they should all work for free. you know, ’cause the economy is bad.
And since all the OC realtors are struggling, its only fair that public employees go out and buy a house they dont need, contributing to the “real economy”. Public employees are just shovel-leaning, trough slurping lazy asses anyway.
Dear Giskard, I happen to be a hardworking female at MWD and I do not appreciate your slanderous remarks. I came from the private sector and brought that work ethics mentality with me. So NO! I won’t work for free. The only ones getting “Free” anything are those who are capable of working but rather sit on their “trough slurping lazy asses” and deplete our governmental system with welfare, food stamps, medicare, etc. Jump down their necks before you critize those of us who have worked hard to EARN, yes I said EARN a decent pension.
im sorry LBgal, looks like you missed the tone of my comment.
http://www.google.com/search?q=sarcasm
I got your irony flavor and I enjoyed it.
You go Girl! MWD employees EARN what they have and they SACRIFCE to get a little more.
Of course they don’t deserve any cost of living increases in future years—inflationary price pressure should not be a concern with Federal Gov’t spending under control.
Anyone going to go and express themselves? Or are you just a bunch of blog complainers?
Anytime most people see billion with a B it is hard for them to wrap their heads around such a large amount.
A big picture view is needed about MWD’s labor costs as a percentage of its operating budget. I work for MWD and I don’t know the precise numbers (I am not in accounting or finance), but what I do know is that we somehow get water to 19 million folks with 2,000 employees. Labor is a relatively small portion of the overall operating budget. Much of MWD’s operational costs are associated with infrastructure.
One can debate whether MWD’s employee salaries and benefits are exhoribitant compared to private entities, and whether the pension hike is reasonable or not, but the one thing I would like to see with this additional media exposure is a broader context in its coverage. THAT seems to be sorely lacking.
Yes, but math is haaaaard.
These raises and especially the pension increases cannot be justified at anytime, not just now. This is how the state, counties and cities are all on the verge of bankruptcy. Private companies that make profits can’t afford this level of pay and pensions, how the hell can a so called public service afford it. Because they dump it on the taxpayers and rate payers, so they can retire early and enjoy pensions and medical coverage that real people cannot get.
These raises and especially the pension increases cannot be justified at anytime, not just now. This is how the FEDERAL GOVERNMENT, state, counties and cities are all on the verge of bankruptcy. Private companies that make profits can’t afford this level of pay and pensions, how the hell can aN INSOLVENT INVESTMENT FIRM afford it. Because they dump it on the taxpayers and rate payers, so they can retire early and enjoy pensions and medical coverage that real people cannot get.
there, fixed that for ya.
redirect that anger toward who is REALLY screwing you BLM- hint: its not the guy that keeps water flowing out of your tap and turds off the street. Its the banker who just raped you and your children.
There are folks that question whether CALPERS will be become like an AIG with a taxpayer bailout required for underfunded pensions. And, California taxpayers would be on the hook. If they can show that this package is revenue nuetral, i.e. the 70 million it would cost is offset by 70 mllion in not just employee concessions of 21 million but another 49 million from attrition (early retirement) and more folks paying into the two tier system, MAYBE the board will go for it.
But gotta say here, two wrongs would never make a right. Taxpayers are tired enough of the banking bailout. They are not going to stand for this.
It is scary when a big story in the news is on a topic that directly influences your own life, as this does me, as an MWD employee.
Boy to you live in a fantasy world. Sounds like you’re getting screwed by both the guy that keeps your water flowing and the banker. You need to get real Giskard. Those kind of pensions and salary increases are obscene.
There are scores of water districts in Orange County, with millions of dollars in reserves. All of these water districts need to be consolidated. Each district has a highly paid board and employees. Some districts have only a hand full of customers. These districts go back to the days, when the economy was primarily agricultural. Eliminate them all and save millions.
I agree with you Les, it is wasteful to have so many districts here in OC. paring down the numbers of suits and politicians would save tons of cash. just remember that you still need lots of skilled people willing to dig holes in the middle of the night when a water main bursts. whats that worth to you?
and BLM- here is a fantasy for you: the only salary that has risen appreciably in this country since 1970 is that of your local Bank Executive. he makes his money by stealing it from you. obscene?
What are you smoking???
Retirement systems are no longer “flush” like they were in the early
0-0s, before the collapse. Fiscal reality says you don’t jack up public retirement pensions with one hand and stick it to the ratepayer with the other.
Where are MWD’s customers supposed to get the extra bucks to support this largesse? Anyone thought of this “nasty” little detail?
What is the $1.5 Billion based upon. What is the retirement benefit based upon 2%, 2.5% or 3% per year at at retirement? What is the comparable retirement for the private sector? Does the District have ANY trouble recruiting? Do not use the total budget for any calculation because it includes the cost of water, a big ticket item. I swear, if a Register reported ever asked a few good questions, I’d just faint. They do not understand local, special district , county or state government in any way shape or form.
It is purported to be a revenue nuetral package, i.e. that through employee concessions 21 million of the 70 is covered, and while not spelled out specifically, it seems like the intonation is that the other money would come from other things like attrition and new employees paying into the PERS under a two tier system.
Wearing three different hats, I have concerns:
1) As an MWD employee, I want to have confidence this is a revenue nuetral proposition, i.e. the concessions made, attrition and new employees paying in to a two tier system, will adequately fund the enhanced retirement. I have heard of the 21 million has a hard number but have not heard specifically how the other $49 would be saved.
2) As a ratepayer to one of the south OC water districts through my condo HOA, I want to be confident in the same, because I foresee hikes related to non-labor costs. (This is a desert, after all, and water supplies from CRA and SWP are tightening), and the infrastructure needs maintenance and expansion. As a taxpayer, I don’t want to be on the hook to bail this pension system out.
The ultimate irony would be to be a MWD retiree in several years and have to pay higher water rates and more income taxes to fund my own pension. YIKES.
Hi Jan. I appreciate your boldness and courage to speak about this in an effort to create thoughtful dialogue. I too work for a southern california water agency and did not approve of our union negotiating 2.5% at 55 several years ago. The folks close to retirement age pushed for that and now they’re gone, leaving us younger workers to deal with the fallout and liability. That kind of shortsightedness got plenty of municipalities into trouble. Fortunately, most water districts are not tied to property tax or sales tax revenue so they have been buffered, for the most part, from the down economy. There has been a hit because of foreclosures though and people not paying their property taxes. I too would like to see the larger picture reported here about the total operating budget and how much of that is actual employee salary, benefits, and pensions. The water agency I work for has as 8% the amount of the overall budget that is dedicated to salaries, benefits, and pensions. It’s a small piece of the pie. Reducing that % would be a $ saver and should be considered in union negotiations. But so too is it a political benefit, the total of which can not be quantified in union negotiations but should be considered.
As a hard working public employee trying to ride out an ARM readjustment and loan modification on my own home, I rely on every penny of my salary and every day I assure you that I know I am a public employee working with ratepayer funds. This continues to challenge me to be more efficient and harder working. I am also a fiscal conservative. However, surely, the OC Register can do a better job in a news article of this magnitude. When I read things like “They’ll be paying more for their benefits and giving up New Year’s Eve as a paid holiday (pity, that), ” and “It’s going to be some real drama. Want to take some action?” I am disheartened. Is this a news article or an editorial? This Teri Sforza seems to be hateful and fearmongering. Is that really the job of this particular news outlet or some obscure blog? Rather than asking tough questions and doing some in-depth analysis, this writer seems to be resorting to scare tactics to incite a reaction. Please, just present the facts and let the reader determine what action they will take. Otherwise, you are doing a disservice to the world of journalism.
Water Agency, thanks for your post. My undergraduate degree was in journalism, and even back in 1980 when I got my degree., I saw the writing on the wall (pun intended) - journalism was getting to be more about myopic advocacy reporting and sensationalism instead of thorough investigative reporting. Therefore, I opted to get a Master’s Degree in another field and am very glad I did. It has served me well.
I realize that John and Ken on KFI are entertainers and not journalists, but it is low when they rant on about folks at MWD calling us “parasites,” “morally bankrupt and need to go to church.”
It has heartening to see a fellow water agency employee who is also a fiscal conservative, efficient and hard working, who is clamoring for fair and balanced reporting on issues of the day, including this one. There are many of us at the different water agencies that wish to engage in a thoughtful, PRODUCTIVE dialogue. The OC Watchdog Blogs on MWD, for the most part, have not been remotely close!
I think the MET employees are underpaid and under pensioned, as are all gov employees-especially FF’s.
We should make sure they all make $100K plus, can “retire” at age 50 and get 100% of finals years pay at retirement.
(sarcasm here folks, please laugh before shelling me with angry comments)
The average Met employee is not currently retiring at 100% of their exiting salary nor would retire making 100% under the proposed new system. Many folks have come here mid career and would be retiring with less than 25 years of service with less than 50 percent their exiting salary, or less than 62 percent under the new system. I am in that category,
It is surely fair to debate whether the proposed enhancement costs can be adequately funded, considering our salaries are paid by the public. Understood. However, what is not fair is to point out the extreme examples and carry on with the sarcastic crap. It gets us nowhere.
If (or when) this doesn’t get MWD board approval, MWD employees are still going to be getting a generous retirement benefit. Jan, it’s encouraging to see your comments here.
Remember, EVERY employee that works at MWD would get this benefit, That includes the upper management that negotiated for MWD. This isn’t just the general employees that get this, which explains Kightlinger and Thomas ‘explaining’ the revenue neutrality. I’d also like to know which of the crack staff came up with the board presentation. They aren’t known for their accuracy, y’know……..
If somebody wants to have some fun, take the top 10 executive managers, and calculate what the retirement benefit would be. Salaries are public info!